GRAY PROPERTY INVESTMENT SUB 1 LIMITED

Executive Summary

GRAY PROPERTY INVESTMENT SUB 1 LIMITED, a newly incorporated micro-entity in real estate trading, exhibits weak financial health with negative equity and liquidity shortfalls. Its current liabilities exceed current assets and total net liabilities are negative, raising concerns about its ability to meet debt obligations. Without demonstrated capital support or improved cash flows, the company is a high credit risk and not recommended for new lending at this stage.

GRAY PROPERTY INVESTMENT SUB 1 LIMITED - Analysis Report

Company Number: 15111461

Analysis Date: 2025-07-20 11:22 UTC

1. Credit Opinion: DECLINE
   GRAY PROPERTY INVESTMENT SUB 1 LIMITED shows significant financial weakness for a company in its first full year of operation. The company reported net liabilities of £5,489 and a negative net current assets position of £40,333, indicating a liquidity shortfall. The presence of creditors falling due after more than one year (£105,156) exceeding net current assets suggests the company is reliant on long-term debt which it may struggle to service given current asset constraints. The negative equity position and small scale (micro-entity) status limits its financial resilience and borrowing capacity. Without evidence of positive cash flow or additional capital injections, the risk of default on credit facilities is elevated.

2. Financial Strength:
   The balance sheet reflects weak financial standing. Fixed assets of £140,000 are offset by current liabilities of £147,638 and longer-term creditors of £105,156, resulting in total net liabilities of £5,489. The company’s shareholders’ funds are negative, indicating accumulated losses or initial capital deficiency. Current liabilities exceed current assets, giving a negative working capital of £40,333, which is a concern for short-term solvency. The company has only one employee (the director), and as a newly incorporated entity (September 2023), it has yet to build a track record or asset base.

3. Cash Flow Assessment:
   Current assets include £107,305, but with current liabilities of £147,638, the company faces a liquidity gap of over £40,000. This suggests potential difficulties meeting short-term obligations without additional funding or asset disposals. No detailed cash flow statement is available, but the negative working capital and high creditor balances imply strained cash flows. The company’s ability to service both short- and long-term debts is questionable, and there is no evidence of operating profits or cash inflows to offset these obligations.

4. Monitoring Points:

• Improvement in net current assets and working capital position.
• Reduction in creditor balances, particularly amounts falling due after one year.
• Capital injections or equity support from the parent company (Gray Property Investment Holdings Limited).
• Evidence of positive operating cash flows or asset sales to improve liquidity.
• Timely filing of future accounts and confirmation statements to monitor financial deterioration or improvement.